PUNTIVE ISSUE NEXT IN FOOD LION SUIT

GREENSBORO, N.C. -- A federal jury here was to begin hearings last week on whether to award punitive damages to the Food Lion supermarket chain in connection with its lawsuit against ABC News. The suit centered on ABC's news-gathering methods.trial.Some observers viewed the award's size as something of a victory for ABC since it amounted to about $1,000 less than the retailer had sought.At issue in

GREENSBORO, N.C. -- A federal jury here was to begin hearings last week on whether to award punitive damages to the Food Lion supermarket chain in connection with its lawsuit against ABC News. The suit centered on ABC's news-gathering methods.

trial.

Some observers viewed the award's size as something of a victory for ABC since it amounted to about $1,000 less than the retailer had sought.

At issue in the lawsuit was the matter of how ABC collected information about Food Lion's sanitary practices, information which resulted in a 1992 "PrimeTime Live" broadcast. Producers for the segment obtained jobs at Food Lion stores, then employed hidden cameras and microphones to obtain information about in-store sanitation.

Food Lion argued it was due $2,432.35 in actual damages, a sum equivalent to the salaries and cost of training for two ABC producers. Food Lion sought no more than a token payment for trespass and breach of employee loyalty. No explanation was broached about why the actual-damage award was slightly less than the amount sought.

The retailer won the liability phase of the case in late December when the jury found the network and its producers guilty of fraud, trespass and breach of fiduciary duty. Food Lion didn't sue for libel, so the jury was not asked to rule on the accuracy of the information contained in the "PrimeTime Live" report. But the broadcast dealt a major financial blow to Food Lion, which has said it experienced as much as $2.5 billion in lost sales and equity value because of it.

Asked about the paltry amount of last week's jury award, Chris Ahearn, a Food Lion spokeswoman, said the company was pleased with the compensatory damages "because we feel it reaffirmed the jury's verdict of the week before that ABC had broken the law and that [the award] was intended to hold the network accountable for that."

ABC could not be reached for comment last week, but has said previously that the suit represents an attempt to "punish the messenger" since Food Lion didn't advance a legal challenge to the "PrimeTime Live" report's accuracy.

SN's parent, Fairchild Publications, is a unit of the ABC component of Walt Disney Co. A majority of Food Lion's voting stock is owned by Delhaize, Brussels, Belgium.

Meanwhile, last week Food Lion said fourth-quarter sales grew 9.5% to 2.77 billion and 1996 sales advanced 9.7% to $9.01 billion.